Loans to boost apprenticeship rates: TAFE

A COALITION plan to give young apprentices $20,000 interest free loans is a "novel" way to boost training numbers and address cost-of-living issues for students, educators say.

Mr Abbott announced the apprentice loans at the coalition campaign launch in Brisbane, saying they would encourage young Australians to start, stay in and finish a trade.

The $85 million four-year pledge would provide trade apprentices with the payments, which like the university FEE-HELP scheme, would be paid back after they complete their training.

The loans were "a hand-up, not a handout" that will help meet the country's skills needs for the next 40 years, Mr Abbott said.

Peak body TAFE Directors Australia said only half of apprenticeships were completed, with lack of disposable income cited as a major disincentive.

"One of the largest issues in exit interviews given has been that disposable income has been really tight," chief executive Martin Riordan told AAP on Sunday.

"We have a critical issue in terms of apprenticeship numbers and if the economy were to have some sort of recovery the first thing we will have is a skills shortage."

The $20,000 loans will be split into four tranches, with $8000 offered in the first year, $6000 in the second, and $4000 and $2000 in the third and fourth.

Apprentices who complete their training would be given a 20 per cent discount on the loans.

"This will be available to the 60,000 mostly young Australians who next year will start learning the trade skills that are in short supply - the electrical, plumbing, carpentry, cooking, welding and mechanical apprenticeships," Mr Abbott said.

"Choosing a trade, no less than going to university, is a good way to make something of your life."

Labor and the Greens criticised the plan, saying the coalition should be pledging more money for the TAFE system.

Labor accused Mr Abbott of harbouring plans to cut $1.1 billion from Trade Training Centres, and said the Rudd government was already providing assistance through programs such as the $5500 Tools for your Trade payment.

Australian Greens leader Christine Milne accused the coalition of pushing costs onto students in a bid to privatise vocational education.

"Opposition Leader Tony Abbott should increase TAFE funding as it is not much use having tools if there are no quality training courses available," Senator Milne said.

Group Training Australia, which claims to be the largest employer network of apprentices and trainees in the country, said the loans plan would help lower apprentice drop-out rates.

Importantly, the policy proposal acknowledges apprentices up-front needs, "as well as their capacity to repay down the track, once qualified, and only when it is financially possible to do so," chief executive Jim Barron said in a statement.

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